A review of the aggregate SEC Form 13F filings for the third quarter of 2012 revealed that US institutional investors added to their holdings in energy and financial stocks, and reduced their exposure to the industrials and consumer staples sectors. Portfolio managers as a group added to positions in Google (GOOG), Microsoft (MSFT), General Electric (GE), Procter & Gamble (PG), and Cisco Systems (CSCO), and trimmed positions in Pfizer (PFE), Johnson & Johnson (JNJ), AT&T (T), Coca-Cola (KO), and Oracle (ORCL).

In The Hedge Fund Mirage, Simon Lack observed that “if all the money that’s ever been invested in hedge funds had been put in Treasury bills instead, the results would have been twice as good.” With that disclaimer in mind, here’s a quick look at some of the notable portfolio changes made by several influential investors in the most recent quarter.

Bill Ackman (Pershing Square Capital): Ackman established new positions in Burger King Worldwide (BKW) and Alexander & Baldwin (ALEX), and eliminated his stake in Citigroup (C). At the end of the third quarter, Ackman’s top holdings included Procter & Gamble (PG), General Growth Properties (GGP), Canadian Pacific Railway (CP), Beam (BEAM), and JC Penney (JCP).

Bruce Berkowitz (Fairholme Funds): Berkowitz established new positions in Lincoln National (LNC) and General Motors (GM). At the end of the most recent quarter, American International Group (AIG), Bank of America (BAC), Sears Holdings (SHLD), St Joe (JOE), and MBIA (MBI) were Berkowitz’s top holdings.

Warren Buffett (Berkshire Hathaway): Buffett and his investing lieutenants, Todd Combs and Ted Weschler, initiated positions in Deere (DE), Precision Castparts (PCP), WABCO Holdings (WBC), and Media General (MEG), and eliminated positions in CVS Caremark (CVS), Dollar General (DG), and Ingersoll-Rand (IR). Top holdings at the end of the quarter included Coca-Cola (KO), Wells Fargo (WFC), International Business Machines (IBM), American Express (AXP), and Procter & Gamble (PG).

Seth Klarman (Baupost Group): Klarman added a new stake in Rovi (ROVI) and sold his position in Hess (HES). Top holdings at the end of the quarter included BP PLC (BP), Oracle (ORCL), Via Sat (VSAT), Theravance (THRX), and News Corp (NWSA).

David Larrabee, CFA, is director of Member and Corporate Products at CFA Institute and serves as the subject matter expert in portfolio management and equity investments. Previously, he spent two decades in the asset management industry as a portfolio manager and analyst. He holds a BA in economics from Colgate University and an MBA in finance from Fordham University. Topical Expertise:Equity Investments · Portfolio Management

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